The problem
In 2024, HairClub found itself at a crossroads. Employee healthcare premiums had reached $115,000 per month, and another sky-high renewal was just around the corner. The leadership team was presented with a tough reality: Absorb the higher costs or make difficult coverage cuts. But with over 140 employees working in eight states, HairClub struggled to find a traditional group plan that was affordable and offered comprehensive coverage in different markets. With their group plan renewing in August, HairClub needed to act quickly.
The solution
HairClub’s broker introduced a modern alternative: the Individual Coverage Health Reimbursement Arrangement (ICHRA). Unlike a traditional group plan, an ICHRA would offer the flexibility and cost-control HairClub was looking for—and a scalable solution that wouldn’t force the company to choose between employees and the bottom line. Zorro partnered closely with HairClub’s Chief Financial Officer and broker to run multiple allowance models and contribution strategies, then designed a cost-effective ICHRA plan tailored to their workforce. Following the mid-year launch and five months of success, Zorro supported HairClub through a smooth open enrollment in the fall of 2024, ensuring employees could choose benefits bundles that reflected their personal healthcare needs—without compromising coverage, convenience, or cost savings.
The results
The switch to a modern benefits model did more than help HairClub regain financial control. It allowed them to proactively account for enrollment fluctuations by structuring an allowance that kept their budget intact despite improved participation. What could’ve been a financial strain became a powerful proof point: with ICHRA, HairClub could keep costs in check even as plan participation expanded.
Reflecting on the impact of the transition, HairClub’s Director of Staff Accounting shared high praise: “I would choose to switch to an ICHRA plan every time because of the cost savings to both participants (the company and employee), the ease of enrollment, and the instant access to a variety of online resources via Zorro’s portal.”